Watchdog to refocus on dawn raids of fraudsters


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Financial crooks face a growing risk of enforcement staff executing dawn raids on their homes as the Financial Conduct Authority’s big-ticket investigations wind down.

Regulatory sources have indicated that the conclusion of investigations into the roles played by multiple banks in fixing foreign exchange and Libor rates will bring an increased focus on more specific wrongdoing.

The rate-fixing inquiries have eaten up thousands of man ours but brought more than £2bn in fines into Treasury coffers. This morning, however, the City law firm RPC will release figures showing that the number of dawn raids carried out by the FCA fell by 60 per cent in a year, from 20 in 2013 to eight in 2014 – the  lowest level since the start of the financial crisis. And RPC is concerned that some of the wrongdoing indulged in by the financial services industry’s sizeable corps of spivs has been bypassed.

Richard Burger, a partner at the law firm, said: “Whilst the FCA has its hands full with Libor and forex, it cannot lose sight of unregulated activities such as boiler rooms, which aggressively target small retail investors – especially those frustrated by low investment returns from mainstream savings accounts.”  

Mr Burger added that while some fluctuation in the number of raids carried out is to be expected, a 60 per cent drop within the space of a year is significant.

“The FCA needs to ensure that the financial services retail market is getting the attention it needs to help to protect innocent people  from investing their savings in fraudulent investment schemes,” he said.

The FCA declined to comment. However, sources close to the watchdog pointed out that there had still been a steady stream of fines and cases brought against financial crooks, ranging from boiler rooms to bad advisers.

The watchdog’s chief executive, Martin Wheatley, stepped down on Friday after it emerged that Chancellor George Osborne had told him he wouldn’t be hired for a third term at the end of his current tenure in March.

His job will be taken on by the regulator’s former enforcement chief Tracey McDermott, until a permanent replacement can be found. Mr Osborne has said he will conduct a “worldwide” search for Mr  Wheatley’s successor.

“Martin’s replacement will, like him, need to be passionate about protecting consumers, promoting competition and completing the job of cleaning up the City,” the Chancellor said.